03 Apr Dynamic pricing for the optimization of holiday apartment rental in Barcelona
Life isn’t a straight line that moves at a steady pace, so why should holiday apartment rental in Barcelona be any different? Numerous factors affect the value of a property on a daily basis, but it’s burdensome and difficult to stay on top of market fluctuations and trends all the time. Throughout the year, an apartment may house hundreds of tenants for short stays, but there are differences between booking in high season and low season, or booking months in advance versus at the last minute. These and many other variables are analyzed by Pricelabs, a tool used by Lodging in its management of holiday apartment rental in Barcelona, which ensures maximum occupancy at competitive prices.
What is Pricelabs?
Pricelabs is a digital tool for the dynamic generation of prices for temporary rental accommodation created in 2014 by a group of people who were promoting their property through Airbnb. They realized they were losing money because they were not adapting their prices to the variations of supply and demand in the market. Pricelabs was born as an Artificial Intelligence solution for small temporary accommodation owners who want to monetize their property.
How does the algorithm work?
The Pricelabs algorithm takes variables into account that relate to the temporary rental of tourism apartments. For example, it identifies local holidays and events that can generate higher profitability and evaluates trends according to different criteria, including:
- season of the year
- the holiday forecast according to country of origin
- the time of booking
- the days remaining before the reservation dates
- demand for similar apartments in the area
The algorithm works automatically, efficiently and dynamically calculating the price at which housing should be offered in different months without having to deal manually with so many factors.
Can the application be customized?
We have found that one of the great advantages of this tool is its ease of customization. As a company specializing in the management of tourist apartments Barcelona, we understand local trends well and can decide on price changes per day or month according to our own experience as well as taking owners’ preferences into account. Our customizations are then overlaid with market data to control the pricing strategy.
How are prices reflected in the ads for a holiday rental apartment?
Price updates can be automatically reflected on the platforms where the rental apartment is advertised, including Airbnb, Booking and the like.
The possibility of establishing minimum stay duration according to how far in advance the reservation is booked is another remarkable functionality. It allows us to ensure a constant rotation of tenants throughout the year and reduce the number of orphan days.
For these reasons and more, this software has become one of our key technological tools at Lodging. Along with others such as home automation and virtual tours, dynamic pricing has allowed us to professionalize and optimally monetize holiday apartment rental in Barcelona.